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International Business Companies (Amendment) Act, 2021

On 6th August 2021, amendments to IBC Act 2016 were published in the Official Gazette and enacted

The Amendments primarily address two areas:

  1. Improvement and modernising existing IBC Act provisions, and
  2. Ensuring OECD and EU Code of Conduct Group requirements relating to the exchange of information are efficiently addressed in the local legal framework

Accounting Records Keeping

  • The obligation to keep accounting records have been in place since the first IBC Act,1994, which was consequently extended into IBC Act 2016. IBCs were requested to keep accounting records for at least 7 years from the date of completion of the transactions or operations to which they each relate. IBCs were given the option to keep accounting records outside Seychelles, while notifying the Registered Agent of the address, where the originals are kept.
  • The new amendments extend this requirement geographically – each IBC shall lodge, not less than on a bi-annual basis, its accounting records at its registered office in Seychelles.
  • Electronic records are acceptable, while the BC shall inform its Registered Agent of the address where the originals are kept.
  • Bi-annual basis is January and July of every year.
  • “Large company” is defined as, per the Revenue Administration Act, a company with turnover more than 50,000,000SCR (approx. 3,8 million USD).
  • “Holding company” is defined as a company with no trade or business operations of its own, but holding interests in other companies or assets.
  • IBCs, other than non-large holding companies, must also prepare annual Financial Summary within 6 months of the financial year end – “Financial Year” is the calendar year unless changed by board resolution.
  •  A Financial Summary must be kept at the registered office. There is no requirement to submit the Financial Summary to any authority, unless there is legal request received from Seychelles authorities.
  •  An IBC that is struck-off, dissolved or de-registered (as from the date of commencement of the law) must ensure that any outstanding accounting records are lodged at its registered office in Seychelles by January or July, following the date that it is struck-off, dissolved or deregistered.
  • A grace period for every IBC to keep their accounting records in Seychelles within 6 months from the date of enactment of the 2021 Amendments (6th February 2022).
  • Penalties for non-compliance with the requirement to keep accounting records are up to USD10,000 on the company and director, if they knowingly permit a contravention.

It is not yet clear whether all accounting records (for the past 7 years) shall be delivered by 6th February 2022.

There is currently a dispute between the Regulator and the industry on that matter, which we hope will be resolved shortly. The law does not have retrospective effect when it comes to lodging accounting records, but it clearly states that the records must be presented on the authority’s request.

Required actions:

  1. To arrange and organise your company’s accounting records for the past 7 years. To be prepared to furnish said accounting records to us, upon request.
  2. To mark 2 important deadlines for each calendar year: 31st of July (for furnishing the accounting records for transactions of the first half of a year); and 31st of January (for furnishing the accounting records of the second half of a year).
  3. To prepare accounting records for the past 7 years for a company that goes into voluntary dissolution / striking-off / de-registration/ discontinuation, and to provide them before such procedures are completed.

Registered Agent records preservation obligations

Registered agents must preserve the following records of companies (including dissolved, struck-off, continued companies) under the administration, for at least 7 years: Registers of members, directors, charges, minutes of meetings and resolution, accounting records in the possession of the registered agent. When a registered agent ceases business, such records shall be provided to the FSA or to any other person approved by the FSA.

Deemed Dissolution period

Automatic dissolution (for non-payment of annual fees) reduced from 7 years to 1 year from the date of striking-off.

Duplicate Certificates

Registrar can issue a duplicate certificate of incorporation, continuation, conversion, re-registration or dissolution, if it receives satisfactory evidence that such certificate has been lost, defaced or destroyed.

Request of Records by Registrar

Registrar may require the company to produce all or any of its records, being kept in or outside Seychelles (e.g., minutes and resolutions of members and directors) for compliance inspection purposes.

Increase in Penalty

The majority of penalty fees for non-compliance have been increased to either a penalty not exceeding US$5,000; or a penalty not exceeding US$10,000.

Accounting records Form Guidance

‘Accounting records’ means documents in respect of —

  • the company’s assets and liabilities;
  • the receipts and expenditure of the company; and
  • the sales, purchases and other transactions to which the company is a party.

The following documents may be provided, as applicable:

  • Proof of holding of assets (register of members, portfolios of securities)
  • Instruments of distribution of dividends
  • Agreements and/or contracts
  • Invoices, receipts
  • Bank statements, if applicable
  • Financial Statements
  • Other records deemed relevant

Guidelines for naming files

For ease, we kindly request that the following file naming guidelines are followed:

  • The name of the file must be in English. Please include the financial year, and the nature of the document.
  • If you upload invoices, the name of the files must contain the word Invoice.
  • For Agreements, the name of the files must contain the type of agreement – Loan Agreement, Assignment Agreement, Purchase and Sale Agreement, etc.
  • For bank statements, the name of the files must contain the word Statement.
  • For financial statements, the name of the files must contain the word FS.

For example: ‘2016 Loan Agreement’ or ‘2018 Sales Invoice’

  • Secure Accounting Records Upload
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  • Documents Required

  • Max. file size: 50 MB.

    The following documents may be provided, as applicable:

    • Proof of holding of assets (register of members, portfolios of securities)
    • Instruments of distribution of dividends
    • Agreements and/or contracts
    • Invoices, receipts Bank statements, if applicable Financial Statements
    • Other records deemed relevant
  • Max. file size: 50 MB.
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